topic Re: Maximizing Credit Utilization -- Please help in Understanding FICO® Scoring

Maximizing Credit Utilization -- Please help

ThePatronizer — Mon, 07 May 2012 21:11:01 GMT

How would you maximize the following Revolving Credit in order to maximize FICO score? I am cloing on a home in August so I have the time and available funds to do whatever it takes to optimize my score. Obviously there isn't a whole lot I can do here, hence the need to "maximize" my effort. What can one expect for a score increase when going from 15% utilization, to say, 9%. Clearly this would be an estimate, but any guesses would be appreciated. Also, I've already received all the CLIs available to me. Thanks everyone!!

Balance Limit Utilization

Barclay Apple Card $0 $700 0.0%

Best Buy Rewards $0 $4,000 0.0%

Household MC $0 $1,305 0.0%

Credit Union Visa $1,471 $3,000 49.0%

HSBC Express Card $386 $2,000 19.3%

$1,857 $12,310 15.1%

Re: Maximizing Credit Utilization -- Please help

Anonymous — Mon, 07 May 2012 21:34:00 GMT

Util is looked at both overall and on individual cards. Having said that, since you have untill august, i would attack the larger of the two big time. Seem like that will save you the most money and increase your scores slightly as it is paid down. Before you apply for the mortgage just do everything you can to get under 10%. Not sure what it will do for you, but when i went from around 30% to unde 10% my scores jumped a lot. I want to say around 30 or more points, but almost 70 points from where i had started, somewhere over 50%. It is the one biggest thing you can control to influence your score in a positive way. I run about 1% right now and just hit my all time high of 813 on eq yesterday. Good luck with it all.

Re: Maximizing Credit Utilization -- Please help

ThePatronizer — Mon, 21 May 2012 14:35:31 GMT

UPDATE: Well I paid $610 toward the larger balance account, and also received a CLI of $400 on the Household MC, and I received my weekly ScoreWatch email indicating NO POINT INCREASE. I find that a little baffling. You would think I would have seen some movement in score. Since that clearly didn't work I think I need to pay of the $386 balance in full on the smaller balance card. I've been reading that you only want to have a balance on one card. I realize there is no exact science but I really didn't want to spend $1k toward my credit card debt but it appears that paying toward the larger balance card is not going to benefit me. Time to try anoher angle.

Balance Limit Utilization

Barclay Apple Card $0 $700 0.0%

Best Buy Rewards $0 $4,000 0.0%

Household MC $0 $1,705 0.0%

Household MC $0 $1,305 0.0%

Credit Union Visa $861 $3,000 28.7%

HSBC Express Card $386 $2,000 19.3%

$1,247 $12,710 9.8%

Re: Maximizing Credit Utilization -- Please help

Anonymous — Mon, 21 May 2012 15:00:35 GMT

I would pay down the smaller card and pay down the larger card so it reports between 130-299 balance. I think you will max out somewhere in there.

What does your EQ FICO look like? With your current util, you'll get some kind of points but not sure if it will be much.

Re: Maximizing Credit Utilization -- Please help

Anonymous — Mon, 21 May 2012 15:01:53 GMT

BTW, if I remember correctly for util purposes, percentages are rounded. So you 9.8% total util is showing as 10%

Re: Maximizing Credit Utilization -- Please help

Anonymous — Mon, 21 May 2012 15:13:30 GMT

Also, you will have to wait a week or two after your statement date on each of these accounts for the balances to be updated on your credit report, possibly causing a change in score.

Re: Maximizing Credit Utilization -- Please help

ThePatronizer — Mon, 21 May 2012 15:31:08 GMT

The balances updated before the SW updated was generated do that isn't the issue, but as the other poster mentioned, it could be due to the fact that I'm technically not below 10% yet due to rounding. And to answer someone else's question, my EQ score stood firm this week at 712 even after the $610 payment and the CLI. Both changes have in fact hit my report and would be factored in to the score.

Re: Maximizing Credit Utilization -- Please help

ThePatronizer — Mon, 21 May 2012 15:53:04 GMT

@Crashem

And there lies the dilema.. of course I would want to pay off the entire small card balance and decrease the larger balance card to between 1-9%, but it really isn't feasible to pay that much. This was the reason for my asking advice on which card to pay first.

If money were no object then, yes, I am aware that your suggestion would be the best option. I'm trying to get over 720 to secure the best rate on a mortgage through my Credit Union. You can see I still need 8 points. Basically, I'm trying to get the most bang for my buck and see if I can get these 8 points just by playing the utilization game, all while not spending TOO much of my savings in the process.

Thanks for all the responses so far, everyone.

Re: Maximizing Credit Utilization -- Please help

Anonymous — Mon, 21 May 2012 23:29:14 GMT

Get rid of one card balance and get other below 30%.

Re: Maximizing Credit Utilization -- Please help

Anonymous — Tue, 22 May 2012 03:48:19 GMT

Side question, how long have the $0 balances been that way? FICO may be removing them from the equation, so to speak, because it thinks they are inactive. If it's been a while, I'd consider letting a balance report one each of them (smaller is better) and then PIF before the August timeframe.

Re: Maximizing Credit Utilization -- Please help

ThePatronizer — Tue, 22 May 2012 14:01:02 GMT

@cassembler

They haven't been reporting that way very long at all. It was my intenion to let a balance report on all cards for as long as possible, up to the closing date for our house, as a means of making sure the CC companies do not de-activate my cards during August. None of the cards have been dormant for more than a couple months.

Re: Maximizing Credit Utilization -- Please help

Anonymous — Wed, 23 May 2012 13:53:36 GMT

You don't need a reported balance for fico to take it into account. However, card issuers may stop reporting on accounts if inactive and fico score may disregard at that point. Two different things. Patron, how much is realistic for you to pay down.

Re: Maximizing Credit Utilization -- Please help

ThePatronizer — Wed, 23 May 2012 16:10:45 GMT

Well I know that each of the card issuers have been reporting as "OK" each month and not as "ND" (meaning No Data). And each of them report "Date of Last Activity" as the current month (except one, which I explain below) .

As far as how much I can pay down.. I just paid $610 toward the larger balance account (following the advice of the first reply to my OP), and another $75 toward the smaller balance card (making the bal due $311 on small card). I would say I could pay another couple hundred dollars, possibly even the $311 required to pay off the small card, if it would help. I'm not too thrilled I already paid $610 and saw no results because that was the amount I wanted to pay in total. I'm thinking I should have paid off the smaller balance card all together, and then the remaining $300 toward the larger balance card. Again, I could pay another few hundred dollars if you think it might help.

Side note: In regards to you suggesting some things may not be reporting (still a bit confused by this)... I have a credit card that was Household Bank but got bought out by Cap1. The Household Credit Limit was $1,305 and the new Cap1 is $1,705 (received a $400 CLI from Cap1). The Cap1 is reporting every month, but the Household account last reported Feb-12. From everything I've read, the $1,305 should count toward my utilization. It's reflected every month so far, even though it's basically a duplicate. I look at it as an error that's working in my favor All of my reports indicate a Util % consistant with the figures I have in my previous posts, and the percentage counts the old Household Acct.

Re: Maximizing Credit Utilization -- Please help

Anonymous — Wed, 23 May 2012 22:21:21 GMT

If the larger card is below 30%, you should just concentrate on getting balance to 0 on other card. Obviously, if you can get balance on larger card to 1-9% of total util and card util, that is ideal.